For foreign companies, the key way to develop business in our country is to create representative offices. The legal definition of this business entity is contained in the Tax Code of Ukraine (TCU).
According to Article 14.1.193 of the Tax Code of Ukraine, a permanent representative office is a place of economic activity carried out by a non-resident of Ukraine. It includes:
The Tax Code of Ukraine in Article 14.1.122 also defines the meaning of the concept of a non-resident. This concept is used with regards to subjects of 3 groups:
Patriot.Legal offers assistance in registering representative offices of foreign companies in Ukraine. Our team of qualified specialists provides a solution to the whole range of legal issues that arise at the start of the business activities of a non-resident entity. Dear clients, focus on winning customers, increasing profits, and trust us to hold legal procedures!
In order to legally carry out activities in the territory of Ukraine, the representative office must be registered with the Ministry of Economy and Trade or accredited by the National Bank (if it is a financial institution).
In accordance with the law, it is possible to register a branch office that will not engage in business management. In such circumstances, it is allowed not to be registered with the State Fiscal Service as a payer of income tax. In this case, an “N” account is opened with a banking institution for funds that will be used to pay salaries, office maintenance and other needs of a similar nature.
If an economic activity occurs, you must register with the State Fiscal Service, pay income tax, and get a current account “P” with a bank.
The following requirements apply to the entire package of documents:
An application to the ministry, where, along with a request for execution, certain data are contained:
An instruction from the head of the firm with a notarized signature on the authority to implement representative functions in Ukraine.
Confirmation of the official registration of the senior management body of a foreign company in the state of origin.
Confirmation of availability of the current account of the foreign business entity with a notarized signature of a bank employee.
In addition to this basic documentation, the registration package also includes:
When submitting documents, a state fee should be paid in the amount of 2,500 US dollars. If there are no reasons for refusing registration, the Ministry of Economy and Trade will issue a certificate with a unique number. Information is entered in the relevant state register.
Since available sources give only a general algorithm for opening a branch of a foreign company, it is advisable to speak with a lawyer in order to understand the details of the registration process. Such consultation will allow you to find out the cost of legal support in a particular case, as well as get answers to questions about likely risks.
The process of legalization of a representative office of a foreign company is associated with certain deadlines:
The taxation of a branch office of a non-resident company is correlated with the rules for paying taxes according to the general system for legal entities. Guidelines regarding the list of taxes and fees that apply in the country are Articles 9 and 10 of the Tax Code of Ukraine:
Registration with the tax service is a mandatory requirement on the way of legalizing a branch of a foreign company in Ukraine. If the representative office begins to conduct economic activities without prior tax registration, then it is equivalent to tax evasion. A similar situation entails the imposition of penalties on the relevant business entity.
The specific amount of tax burden for a non-resident payer depends on the types of activities carried out.
It is charged in accordance with the provisions of Article 133.2.2, which refers to the receipt by permanent representative offices of income from sources of origin in Ukraine. Profits are taxed on the basis that applies to resident companies.
As an employer, a representative office is a tax agent for its employees. We talk about paying:
Do you want to comply with the law when registering a branch in Ukraine? Contact us! Patriot.Legal specialists are ready to use all their expertise and experience to help you!
Patriot.Legal advises foreign companies on establishing their business entities in Ukraine and registers representative office of a foreign company in the Ministry for Development of Economy, Trade and Agriculture as well as in the National Bank of Ukraine (if it is a financial company).